Q1FY23 Preview: Indusind Bank: Net Interest Income seen at Rs40.7 billion, PAT at Rs14.4 billion

19 Jul 2022 , 10:57 AM

Result date: 20^th July, 2022
Recommendation: Buy
Target price: Rs1,110

Indusind Bank is likely to report a strong performance in the June 2022 quarter as compared to the year-ago quarter. The bank clocked in a long growth of 18.4% on a year-on-year basis (improved from 12.4% in the March 2022 quarter) and 4.4% sequentially. Deposits grew 13% over the year-ago quarter and 3.3% sequentially. CASA ratio remained healthy at 43.2%, up 40 basis points sequentially.

Healthy loan growth could rub off favorably on the Net Interest Income, which is likely to grow 40.7%. The bank’s net interest margin could remain stable in the range of 4.10-4.25%.

Sharp drop in provisions could more than offset the weakness in pre-provisioning operating profit. Consequently, the Profit After Tax (PAT) could grow 42% on a year-on-year basis.

Important management insights to watch out for:

• Trends in loan growth, margins
• Asset quality trends seen in the MFI

(Rs billion)	June 2022 estimates	YoY change	QoQ change
Net Interest Income	40.7	14%	2%
Total Income	57.1	7%	(3)%
Pre Provisioning Op. Profit	31.4	(1)%	(7)%
Profit After Tax	14.4	42%	3%

Source: IIFL Research